The hedge fund Renaissance Technologies settled with the IRS over a longstanding tax dispute.
Per the WSJ, the settlement could total $7 billion, making it one of the largest federal tax settlements in history.
Political megadonors Robert Mercer and James Simons will both make payments in the settlement.
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Billionaire hedge fund manager James Simons, GOP megadonor Robert Mercer, and other insiders at hedge fund Renaissance Technologies will pay the Internal Revenue Service (IRS) up to $7 billion to settle one of the largest federal tax disputes in history, The Wall Street Journal reported Thursday.
The sum will account for back taxes, interest, and penalties. Simons, who founded Renaissance and is considered a pioneer for his quantitative approach to investing, will pay an extra $670 million, per the WSJ.
Renaissance, one of the best-performing hedge funds in history, announced the settlement in a letter to investors that said it resolved the “longstanding dispute” with the IRS over the firm’s tax treatment of some transactions that occured from 2005-2015. Those transactions were under its Medallion fund, which The Journal reported manages $15 billion and only includes the money of employees and some family and friends.
“Renaissance’s board eventually concluded that the interests of our investors from the relevant period would be best served by agreeing to this resolution with the IRS, rather than risking a worse outcome,” the letter said. The letter also specified that the board of directors of Renaissance during the relevant years, in addition to some other investors, would owe payments in the settlement.
That includes Mercer, who served as co-CEO at Renaissance until stepping down in 2017 during backlash related to his political activism. Mercer was one of the most prominent conservative megadonors to Donald Trump’s 2016 campaign for president, donating around $25 million through various GOP efforts, Insider’s Debanjali Bose reported.
Meanwhile, Simons is a longtime donor to Democratic candidates. Simons and his wife gave a combined total of $26 million to Democrats in the 2020 election cycle, CNBC reported.
The letter did not specify over what timeline the settlement will be paid out and said more details will be provided at a later date.